Japan services PPI picks up to 3.7% as August revised lower, backing BoJ hike path

The downward revision to August makes the September print more hawkish than the headline suggests: services prices are accelerating, not just holding. That adds weight to the case for the BoJ’s Outlook Report to effectively declare underlying inflation has reached 2%, and supports December hike pricing, lending the yen modest support into Friday. Short-end JGB yields could edge higher as markets price a firmer BoJ tone. Oil-driven cost pressure from the Iran conflict remains a background inflation risk, but this data shows domestic, labour-driven pressure building too. The vote split and Ueda’s press conference remain the bigger yen catalysts.